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Weekly Commodities ETF Report: Crude Ends Week Lower on Weak China Q3 Gross Domestic Product (GDP); Gold Logs Marginal Gains on Uncertainty Over Fed Rate Cut

(MT Newswires) – Crude ended Friday’s session and the week lower, as China reported that its economy grew at the slowest pace in nearly three decades. China — the largest crude importer in the world — said its economy grew by 6% in the third quarter, the slowest pace in 27 years as the 15-month long trade war with the United States continued to bite. Earlier in the week, oil had been trading lower but rose briefly following news of a temporary ceasefire deal between the US and Turkey, allowing 120 hours for Kurdish forces to retreat further into Syria. The news helped ease Middle East tensions, which have been strained since Turkey’s incursion into Syria. Back home, the Energy Information Administration on Thursday said stockpiles of commercial crude in the US rose by 9.3 million barrels in the week through Oct. 11 to reach 434.9 million barrels, sending inventories about 2% above the five-year average for this time of year. The build was also three times more than expected, though gasoline and distillate inventories fell due to refinery maintenance.  Industry experts polled by S&P Global Platts had been expecting a 4.0 million-barrel build last week while the American Petroleum Institute late Wednesday reportedly said inventories increased by 10.5 million barrels.  The government data was released a day later than usual due to the Columbus Day federal holiday on Monday. Meanwhile, the number of oil rigs operating in the US rose by one to 713 in the week that ended on Oct. 18, hovering near its lowest level since May 2017, according to data compiled by energy services firm Baker Hughes (BHGE) on Friday.

Light, sweet crude oil for November delivery fell 2.13% for the week, settling at $53.93 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 1.44% over the five-day period and settled at $1.62 per gallon on Friday. Natural gas was up 6.12% for the week, ending Friday at $2.32 per 1 million British thermal unit.  

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) declined .92% this week, compared with an increase of 2.03% the prior week.

Gold ended lower on Friday at $1,498.30, despite a weaker US dollar and lower stock markets as uncertainty continued over whether the Federal Reserve (Fed) will cut interest rates once again when it meets on Oct.30. However, the yellow metal managed to log modest gains of 0.36% for the week. Investors remain unsure whether a third cut to interest rates will come from the Fed after minutes of the last meeting showed some governors strongly opposed to cuts. Earlier in the week, gold had seen gains as concerns grew that a tentative deal between the United Kingdom and the European Union will again be blocked by a hostile Parliament. British Prime Minister Boris Johnson said he reached a deal for an orderly departure from the European Union, though doubts remain that he can get Parliament’s approval for the pact, particularly after the Northern Irish Democratic Unionist party said it would not support the deal. Meanwhile, copper prices rose, ending Friday’s session at $2.60 and the week, up 0.57%. The gains came on the back of upbeat Chinese data on property and infrastructure growth. Property investment in the East Asian country grew 10.5% in the first nine months of 2019, infrastructure investment rose 4.5% and industrial output beat expectations at 5.8% in September. Analysts are optimistic that China will implement more stimulus measures in Q4 to spark further growth in the real estate and infrastructure sectors.

In agricultural commodities,  wheat rose for seven weeks in a row, and on Thursday hit a three-month high,  as cold weather in the US grain belt threatened supplies of the grain.  On the other hand, dry weather in other countries like Argentina and Australia is expected to lower world wheat supplies. Wheat ended the week up 4.12%, closing the Friday session at a price of $5.32 per bushel. Meanwhile, soybeans were down 0.05% for the week, and closed Friday at $9.34 per bushel; and corn for December delivery fell 1.95% in the week and settled at $3.91 per bushel in Friday’s session. Other commodities were mostly weaker: cocoa was down 1.27% for the week and closed Friday’s session at $2,486 per tonne; sugar had a weekly decline of 0.81% and settled at a price of $0.12 per pound on Friday; and coffee was around $0.96 per pound at Friday’s close, up 2.52% for the week.

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The SummerHaven Dynamic Commodity Index Total ReturnSM (SDCITR) is an index designed to reflect the performance of a portfolio of 14 commodity futures. The index is reformulated each month from 27 possible futures contracts. The 14 selected contracts are equally weighted and represent six sectors: Energy (WTI crude oil, Brent crude oil, natural gas, heating oil, gasoil, RBOB gasoline), Precious Metals (gold, silver, platinum), Industrial Metals (aluminum, copper, lead, nickel, tin, zinc), Grains (corn, soybeans, soybean meal, soybean oil, wheat), Livestock (live cattle, feeder cattle, lean hogs) and Softs (coffee, cocoa, cotton and sugar). One Cannot invest directly in an index.

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USO002079 Ex. 12/31/2019